Actual/365F: Definition & Meaning | Bondfish
Actual/365F (Actual/365 Fixed) is a day count convention that calculates interest by dividing the actual number of days in a period by a fixed 365-day year — even when the period includes February 29.
What it means
A day count convention is the rulebook a bond or swap uses to turn calendar days into an interest amount. Under Actual/365F, you count the actual calendar days that have elapsed in the accrual period, then divide by 365 — the denominator never changes, which is why the convention is called “Fixed.”
Actual/365F is common in sterling (GBP) money markets and many interest rate swaps, and appears in some Commonwealth bond markets. It contrasts with Actual/360 (used in U.S. and euro money markets) and with Actual/Actual conventions, where the denominator reflects the real length of the year or coupon period.
Why it matters for bond investors
The convention changes the accrued interest you pay or receive when a bond trades between coupon dates. In a leap year, Actual/365F accrues slightly more than one full coupon over 366 days (366/365 of the annual rate), a small but real difference from Actual/Actual. Always check a bond’s prospectus or term sheet for its day count before comparing quoted yields.
Example
Interest = Principal × Rate × (Actual days / 365)
€10,000 at 5% for 92 days: 10,000 × 0.05 × 92/365 = €126.03
Related terms
This definition is for general information only and is not investment advice. Bond investing involves risk, including possible loss of principal.